App Development Revenue Expectations, What to Focus on

Even though app development industry is one with high demand and a consistently increasing number of customers and venues for the syndication of your product, the figures pertaining to the median income of developers and percentage of those who are actually succeeding in making a profit can be somewhat discouraging. We’ll try to give you short overview of how welcoming different platforms are for budding developers and what business models seem to hold the most promise.

The End of the (Poverty) Line

The term app poverty line refers to the breakpoint after which you are making more than $500 per app per month, and you might be surprised to learn that, when global app market is concerned, no less than 60% of developers are bellow that line. What’s even more disconcerting is that this statistic only considered apps that were intended to make profit, so the number isn’t skewed by apps that were never meant to generate revenue in the first place.

If you want platform specific numbers, here they are:

iOS is in the lead with ‘only’ 46% of developers being on the unenviable end of the line;

followed by HTML5 developers, with 59% earning less than $500 per app per month;

Android with 62%;

BlackBerry 10 with 70%;

Windows Phone with 79% and

Windows 8 with staggering 89%.

What’s somewhat surprising is that the earning potential of a platform is not always directly proportional to the popularity of a platform among the developers. While not being the most lucrative platform when it comes to app development, Android still managed to become a primary platform for 37% of developers, while iOS and HTML5 attracted 32% and 17% respectively.

Likewise, platforms are differentiated by the most profitable business model. For instance, while in total, ecommerce based model is the most profitable one, Android developers seem to be making most profit from fremium apps, which is not all that surprising when you consider the peculiarities of different app stores and the culture that has developed behind certain platforms.

Business Models

One of the most important considerations that you need to make, even before you begin working on UX design, deployment method or other aspects of the app, is the business model that it will rely on. Again, most popular business models are not always the most profitable ones. For instance, while contract work is by far the most popular, mostly due to the fact that it is one of the safest methods (you are contracted to make an app, and are paid an agreed upon sum regardless of the app’s success on the market), it is behind ecommerce and subscription based models when it comes to profitability.

Other popular and relatively profitable ways of making revenue include in app advertising, pay per download, in- app purchases and different affiliate programs. Naturally, your choice of a business model will be heavily influenced not only by the type of the app itself, but also by the platform, and consequently, the market that you are developing it for. Likewise, some models are only effective if employed by large companies with enough resources, others work better on paid apps than they do on free ones, and so on. Finding the right balance can be quite demanding, but there are enough resources and helpful people online to try and help you find your way.